Per Lindberg of Oslo, Norway-based investment bank ABGSC Sundal Collier yesterday published a rare thing: an initiation of coverage of Apple with a Sell rating and a $400 price target.
The maps fiasco – affecting hundreds of millions of users of iOS 6 – serves as a crude reminder that all cycles of vogue eventually come to an end, as spirits of innovation give way to acts of protection – in quite vivid display today. Anticipating sharply decelerating earnings growth next year, followed by absolute erosion thereafter […] At this juncture, there is also another common force which may rouse concerns about Apple to vigorous life. Competitors are stepping up their campaigns to not only close the lead that the Cupertino company has enjoyed, but also to displace it as the architect of the world’s most popular ecosystem of software and services. The facts speak for themselves: (i) Google’s Android outsells Apple’s iOS by a factor of 4-5x in terms of monthly smartphone activations, (ii) Samsung ships nearly twice as many units of smartphones on an annualised basis (with sales values on a par with Apple’s), (iii) the iPad is quickly ceding market share to the tablets powered by Android and Microsoft’s freshly launched Windows 8. The patterns discerned are illuminating and ominous in equal measure. Apple may have fostered the rush of upgrades from feature phones to smartphones and from laptops to tablets through its eye-opening creation of the iPhone and the iPad, but the mass industrialisation process is progressively taken over by others willing to embrace a horizontal model. Unlike Apple, which remains tightly proprietary on both the hardware and software/services fronts, Google and Microsoft are making their ecosystems available to third parties (competitors and customers alike). We take the view that in a market as large, as commoditised and as complex as consumer electronics, open systems will eventually push those that are closed, into obsolescence. The upshot is that the day Apple fails to make leap-frog innovations, then it is highly exposed to wars of attrition in contention with dozens of manufacturers powered by operating systems, value-added applications and online services controlled by its arch-rivals Google and Microsoft. As judged by the lacklustre reception of Apple Maps (wholly inadequate in terms of accuracy and completeness), iPhone 5 (plagued by iOS 6, manufacturing difficulties) and the mini-iPad (a rather immaterial size reduction of iPad 2), there are tangible signs that Apple no longer moves ahead at a pace required to avoid vicious price wars.
The maps fiasco – affecting hundreds of millions of users of iOS 6 – serves as a crude reminder that all cycles of vogue eventually come to an end, as spirits of innovation give way to acts of protection – in quite vivid display today. Anticipating sharply decelerating earnings growth next year, followed by absolute erosion thereafter […] At this juncture, there is also another common force which may rouse concerns about Apple to vigorous life. Competitors are stepping up their campaigns to not only close the lead that the Cupertino company has enjoyed, but also to displace it as the architect of the world’s most popular ecosystem of software and services. The facts speak for themselves: (i) Google’s Android outsells Apple’s iOS by a factor of 4-5x in terms of monthly smartphone activations, (ii) Samsung ships nearly twice as many units of smartphones on an annualised basis (with sales values on a par with Apple’s), (iii) the iPad is quickly ceding market share to the tablets powered by Android and Microsoft’s freshly launched Windows 8. The patterns discerned are illuminating and ominous in equal measure. Apple may have fostered the rush of upgrades from feature phones to smartphones and from laptops to tablets through its eye-opening creation of the iPhone and the iPad, but the mass industrialisation process is progressively taken over by others willing to embrace a horizontal model. Unlike Apple, which remains tightly proprietary on both the hardware and software/services fronts, Google and Microsoft are making their ecosystems available to third parties (competitors and customers alike). We take the view that in a market as large, as commoditised and as complex as consumer electronics, open systems will eventually push those that are closed, into obsolescence. The upshot is that the day Apple fails to make leap-frog innovations, then it is highly exposed to wars of attrition in contention with dozens of manufacturers powered by operating systems, value-added applications and online services controlled by its arch-rivals Google and Microsoft. As judged by the lacklustre reception of Apple Maps (wholly inadequate in terms of accuracy and completeness), iPhone 5 (plagued by iOS 6, manufacturing difficulties) and the mini-iPad (a rather immaterial size reduction of iPad 2), there are tangible signs that Apple no longer moves ahead at a pace required to avoid vicious price wars.
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